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The Republican Layoff Conspiracy
February 22, 2002
by Kevin J. Shay

Lost in the excitement last year over Enron and the purported War on Terrorism was this fact: 2001 was the worst year for workers since the early Reagan years.

The ranks of the unemployed grew by 2.6 million last year, the most since 1982, according to the U.S. Department of Labor. Most of those new former laborers collecting unemployment were laid off - estimates on the number of layoffs in 2001 ranged from 1.8 million to 2.5 million.

I was one of those 2 million or so layoff victims. I had worked as a reporter and editor for Dallas-area newspapers owned by Texas-based Belo Corp. for the previous nine-and-a-half years. My last position was as a business reporter for The Dallas Morning News. Remaining unconvinced that my company was doing as poorly as management said, I have conducted some research into the finances of Belo and other companies that made some major layoffs in 2001.

My findings may not surprise you: Half of 30 companies picked at random that made layoffs of at least 1,000 workers last year made money. And only one of those 15 that lost funds in 2001 showed a loss the previous year. I did not include Belo in that group since it made layoffs of less than 1,000 employees, but Belo about broke even last year while making $151 million in 2000.

Many of the firms that made large layoffs in 2001 pulled down good money. For example, New York-based financial firm Citigroup Inc. announced it would slash 7,800 jobs last November, then went on to record a whopping $14.1 billion in profit in 2001. That came on top of making $13.5 billion in 2000 and $9.9 billion in 1999.

Why did Citigroup need to cut almost 8,000 employees when it made so much and paid its chief executive, Sanford Weill, an obscene $225 million in 2000? Weill has a history of leaving a trail of layoffs that help boost his pay. Between 1987 and 1997, when he was CEO of Travelers Insurance, which merged with Citibank to form Citigroup, Weill cut jobs by one third and became one of the highest paid chief executives in the country.

Another company that made off well last year while cutting people was the New York Times Co., which said it would send 1,260 workers to the unemployment lines last June. The Times Co. made $444.7 million in 2001, after hauling in $397.5 million in 2000 and $310.2 million in 1999. Other companies I researched - including IBM, Verizon, WorldCom, Dell, Hewlett-Packard, American Express, Bristol-Myers, Sara Lee, Tribune Co., VF Corp., Wachovia Corp., and Proctor & Gamble - took in similar nice profits before and after the layoffs.

So what's going on here? You can't blame all these layoffs on September 11 - about 63 percent of job cuts tracked last year by the Labor Department came before that date. And you obviously can't blame declining profits in many cases. Is there some kind of campaign by executives, who were complaining about not having enough qualified employees throughout much of the 1990s, to reduce job security, wages, and benefits through increased layoffs?

In effect, are corporate bigwigs taking it on themselves to turn the employees' job market of much of the last decade back into an employers' market? Or is it just plain old greed, in which shareholders who care more about increased profits than the overall welfare of the company and its employees, not to mention the costs of job cuts to society, are demanding these layoffs? Where's Oliver Stone when you need him?

As you might guess, this layoff conspiracy leads directly to the White House. Remember what Bush and Cheney did in December 2000 as soon as they had stolen - er, been appointed to - the presidency? Cheney, a former corporate bigwig himself, went on major television programs and talked about how bad the economy was, blaming it on Clinton, when most real economists agreed it was not that bad - yet.

Bush, a failed corporate smallwig who could only make money through a questionable stock transaction with Harken Energy and as part owner of the Texas Rangers baseball team by convincing taxpayers to fund most of a new stadium, talked the economy down in his own way in front of crowds of supporters and in one-on-one meetings with reporters. Bush's handlers wouldn't let him go on TV and actually answer a question more complex than "How's your golf game?"

Their aim was to blame the impending recession on the Clinton administration, and to pay back their huge campaign contributors, many of whom were these same corporate executives who complained before about not having enough qualified employees, by aiding the return of an employers' market.

For example, Ivan Seidenberg, president of Verizon Communications, the $67 billion telecommunications giant formed by the union of Bell Atlantic and GTE, gave $1,000 to Bush's campaign, the legal limit for an individual. His company contributed $818,000 to Republican Party committees and $3 million to the 2000 Republican National Convention. Verizon was one of the first firms to lay off workers last year, cutting 10,000 jobs. The company ended up making $590 million in 2001, after hauling in an astronomical $11.8 billion in 2000. That year, Seidenberg amassed $15.7 million in salary alone.

Other company executives gave even more to the GOP. Cisco Systems President John Chambers donated $280,000 by himself to Republican committees in 2000, the same year he made $157 million. Cisco laid off 8,500 people last year after making $2.7 million in 2000. The firm did lose $1 billion in 2001, but it made up about 40 percent of that loss in the first three months of its 2002 fiscal year.

Then there is Cheney's former firm, Dallas-based Halliburton Co., which is vying to become the next Enron and will more than likely announce some major layoffs soon. Halliburton's stock dropped under $16 a share on Feb. 20 after reaching $49.25 nine months before. The freefall was blamed largely on multimillion-dollar asbestos court verdicts, and one rumor before Bush's State of the Union address in January was that he was going to call for limiting such asbestos claims. Bush didn't then, but he will sometime, just wait.

Pittsburgh-based Harbison-Walker Refractories Co., a former subsidiary of Dresser Industries, which Halliburton bought in 1998, has already filed for bankruptcy. Will Halliburton be next? And is this part of the reason why Cheney is pushing so hard for legislation that will benefit his former employer, such as drilling for oil on protected federal lands like in Alaska? When Cheney left in 2000 as CEO of Halliburton, a position he held since 1995, he sold his stock for more than $40 a share. He personally pocketed more than $33 million in 2000 from Halliburton. You don't think Cheney remembers that deal?

Cheney presided over several rounds of job cuts, including of about 11,000 workers in 1999, a year that Halliburton showed a $438 million profit. Since those layoffs, Halliburton's profits have risen, to $501 million in 2000 and $809 million in 2001.

An interesting sidebit to this story is that Houston-based Kellogg Brown & Root, another Halliburton offshoot, recently agreed to pay the U.S. government $2 million to settle allegations it defrauded the military by submitting false claims for delivery orders between 1994 and 1998. So here you have Cheney trying to at least indirectly help his former company, which is possibly preparing to lay off more workers, through friendly legislation as one of its subsidiaries reportedly defrauds all of us.

And yes, Cheney still lived in the Dallas area until after the November 2000 election in apparent violation of the 12th Amendment to the U.S. Constitution. He didn't sell his Dallas-area mansion to a major Republican donor until Nov. 30, 2000, according to deed records. Through a local television station's camera, I saw Cheney stroll out of his Dallas-area home late at night after Nov. 7, 2000. Contrary to Republican spin, Cheney never was a resident of Wyoming in 2000.

Company executives and their apologists will tell you they "need" to lay off workers - even when the firm is making boatloads of money - to remain competitive in today's market. Don't buy that bull. In the increasingly merger-friendly environment, competition for many large megacorporations is not much of an issue. The main issue for many shareholders is to acquire as much capital and return on investment as possible. For these multimillionaires and billionaires, money is only a way to keep score, not a basic necessity that can mean the difference between eating and not eating. And they only feel good when that score is going up, even if it is at the expense of a person making $20,000 or $30,000 a year.

Most really liked Bush's tax cut plan last year, which netted the super wealthy millions of additional dollars. The wealthiest 1 percent of Americans already own about 40 percent of the wealth, and that is only expected to grow under this current so-called "Christian" administration (idle thought: would Christ really support this feed-the-rich-and-soak-the-poor administration?)

So what do we do about this situation? We stage a nonviolent revolt. We organize politically. We educate people on companies that practice alternatives to layoffs like reducing hours - Phil Hyde of Timesizing.com highlights numerous good examples. We educate people on studies that show layoffs actually hurt companies' profits due to lower morale, a loss of momentum, and other factors, such as one last year by Watson Wyatt Worldwide, a Washington, D.C.-based consulting firm.

We support unions, even though they are not perfect themselves but are better than nothing. We demonstrate. We go on strike. We file employment discrimination claims with government agencies when we are laid off - I have a claim pending against Belo myself. In short, we do whatever we can to make the bigwigs feel our pain and perhaps think twice about laying us off just to make a few more bucks in the future.

In my daydreams, I see myself taking a page from Michael Moore, the populist film maker of Roger and Me who dogged former General Motors Chairman Roger Smith after GM closed plants and laid off thousands of workers in Moore's native town of Flint, Mich., in the 1980s, despite GM continuing to make billions in profits. I see myself bursting into Belo shareholders' meetings and firing questions about the layoffs at stunned executives.

My wife, Michelle, even recently had an actual nocturnal dream about her and me and others doing just that at some Belo meeting and causing a big stink - things are really getting weird when your spouse has dreams about your former workplace. In her wild dream, Bush happened to be there and offered to help place a story I wrote in a national newspaper or magazine. I turned down Bush's help on principle, figuratively telling him to shove it before I walked off. It was only a dream, but the scenario sounds good to me.

Some say we shouldn't concern ourselves with this layoff conspiracy because executives like Smith and Weill and Seidenberg and Chambers - as well as their political conspirators like Bush and Cheney - will get their just desserts in their afterlives. Some believe the corporate and political masters will be sent to Hell - wherever the hell that is - to live in eternal damnation, if they aren't there already. Others say they will have to reincarnate to the Earth as low-level workers and see what it's like to live paycheck to paycheck for themselves.

I don't know about those theories. But I do believe that one day in the near future, such executives and politicians will be forced to search the vacuous depths of their souls, and answer to themselves and to a Higher Authority.

And then, perhaps there will be hell to pay. Maybe through their redemption, the rest of us will benefit. Maybe not. All I know is we have to keep fighting, right here, right now.


Kevin J. Shay is a Texas-based freelance writer and founder of LayoffWatch, an Internet site that tracks layoffs and the profits of these companies at http://www.angelfire.com/biz/shaybiz/layoff.html. He can be contacted through email at mkshay40@yahoo.com.

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